NUROSOFT : 2020 Annual Financial Report (en)

ANNUAL

FINANCIAL REPORT

For the year

ended December 31, 2020

Page 1 of 89

NEUROSOFT S.A. Annual Financial Report for the year ended December 31, 2020

CONTENTS OF ANNUAL FINANCIAL REPORT

STATEMENTS OF MEMBERS OF THE BOARD OF DIRECTORS	................................ 3
ANNUAL REPORT OF THE BOARD OF DIRECTORS ............................................	4
INDEPENDENT AUDITOR'S REPORT ............................................................	32
ANNUAL FINANCIAL STATEMENTS..............................................................	37

Page 2 to 89

NEUROSOFT S.A.

Statements of Members of the Board of Directors

STATEMENTS OF MEMBERS OF THE BOARD OF DIRECTORS

The following statements are given by the following Members of the Board of Directors of the Company:

1. Nikolaos Vasilonikolidakis, Chairman of the BoD
2. Epameinondas Paschalidis, CEO

The undersigned, in our above-mentioned capacity, as specifically appointed by the Board of Directors of the societe anonyme company under the name "Neurosoft Software Production Societe Anonyme" (hereinafter referred to as "Company" or as "Neurosoft"), we state, and we assert that to the best of our knowledge:

1. The annual financial statements (Consolidated and Separate) of the society anonyme company under the name "Neurosof Software Production Societe Anonyme" for the period from January 1, 2020 to December 31, 2020, which have been prepared in accordance with the applicable International Financial Reporting Standards, as adopted by the European Union, provide a true and fair view of the assets and liabilities, the owners' equity and the results of the Company, as well as of the companies which are included in the consolidation and
2. The enclosed annual Report of the Board of Directors of the Company provide a true and fair view of the evolution, performance and the financial position of the Company, as well as of the companies' which are included in the consolidation, including the description of the main risks and uncertainties they face and relevant information.

Iraklio, April 19, 2021

Nikolaos Vasilonikolidakis

Epameinondas Paschalidis

Chairman of the BOD

CEO of the Company

Page 3 of 89

NEUROSOFT S.A. Annual Report of the Board of Directors for the year from January 1, 2020 to December 31, 2020 (Amounts in Euro, unless stated otherwise)

ANNUAL REPORT OF THE BOARD OF DIRECTORS

of «Neurosoft S.A. »

On the consolidated and separate Financial Statements

for the financial year from January 1, 2020 to December 31, 2020

This Annual Report of the Board of Director (hereinafter referred for brevity as the "Report" or "Annual Report"), refers to the fiscal year 2020 (01.01.2020-31.12.2020). It has been prepared in accordance with the provisions of Articles 150-154 of Law 4548/2018 and article 4 of Law 3556/2007 and contains in a concise but meaningful, substantive and comprehensive manner all relevant information required by law to provide substantial and detailed information about the activity, during this period, of the company under the name «NEUROSOFT SOFTWARE PRODUCTION SOCIETE ANONYME» (hereafter referred to as the "Company" or «NEUROSOFT») and the NEUROSOFT Group of companies (hereinafter referred to as the "Group"), which apart from the Company include the following affiliated companies:

1. «Neurosoft Cyprus Ltd.», headquartered in Cyprus, in which the Company holds a stake of 100% of its share capital,
2. «Neurosoft Romania Srl headquartered in Romania, in which the Company holds a stake of 95% indirectly through its subsidiary Neurosoft Cyprus Ltd,
3. «Neurosoft Cyber and Analytics Ltd », headquartered in United Kingdom, in which the Company held a stake of 100% of its share capital. During 2020, Neurosoft Cyber and Analytics Ltd applied to be struck off and dissolved and the registrar accepted the application in June 2020. According to the notification of dissolution issued by the Companies House on October 8, 2020, Neurosoft Cyber and Analytics was dissolved on October 13, 2020.
4. Daedalus Technologies FZCO, headquartered in UAE, in which the Company holds a stake of 100% of its share capital.
5. On 15-12-2014 with the completion of the merger through absorption of the company under the name
   "KESTREL INFORMATION SYSTEMS SOCIÉTÉ ANONYME", by NEUROSOFT S.A., the Company absorbed the following subsidiaries of KESTREL:

1. Kestrel Information Systems BULGARIA OOD in which KESTREL SA held the 100% of its share capital. o Kestrel Information Systems DOO BEOGRAD in which KESTREL SA held the 100% of its share capital.

The above two mentioned subsidiaries are inactive and under dissolution.

1. On 23-06-2008 «GAEKNAR VENTURES LTD» and Mr. Paschalidis, a member of the Board of Directors of the Company established the Company under the trade name «NEUROSOFT ROMANIA SRL» headquartered in
   Bucharest, which during the fiscal years 2011 to 2018 remained inactive.

Page 4 of 89

NEUROSOFT S.A. Annual Report of the Board of Directors for the year from January 1, 2020 to December 31, 2020 (Amounts in Euro, unless stated otherwise)

1. On 03-06-2016, the Company established the company under the trade name of «NEUROSOFT CYBER AND ANALYTICS Ltd», with registered offices in United Kingdom, which during the fiscal year 2016 to 2018 remained inactive. According to the notification of dissolution issued by the Companies House on October 8, 2020, Neurosoft Cyber and Analytics was dissolved on October 13, 2020.
2. On 31-03-2020, the Company acquired the 100% of the share capital of «DAEDALUS TECHNOLOGIES FZCO», a technology provider of security and ICT systems integration consultancy services operating in UAE and MENA region established under the laws of the Dubai Silicon Oasis (DSO) Free Zone.

This report accompanies the annual consolidated and separate financial statements for the fiscal year 2020 (01.01.2020-31.12.2020) and since the Company prepares consolidated financial statements, this report's main and primary reference is to the consolidated financial data of the Company and its related companies. The report together with the financial statements and other information and statements required by law, are included in the Annual Financial Report for the fiscal year 2020.

The sections of this Report and the contents thereof, are as follows:

SECTION A

Significant events that occurred during the year 2020

The significant events that occurred during the year 2020 (01.01.2020-31.12.2020) with calendar order, as well as any impact on the annual financial statements are summarized as follows:

1. Coronavirus (COVID-19) impact

At the beginning of 2020 still on going, there was a worldwide outbreak of coronavirus (COVID-19) which impacted the global economy as many governments were forced to take stringent steps to limit or delay the spread of the virus. The restrictive measures and actions taken by the Government in response to the spread of COVID-19 within 2020 have led to a significant disruption to the operations of many companies and a significant increase in financial uncertainty.

The COVID-19 outbreak, has materially affected our industry and business although its impact on our financial performance was not significant. Although, Group's activities were not suspended, some of its business activities have been limited depending on the suspension of certain customers' activities.

The Group has responded quickly and undertaken all necessary actions to protect its employees and clients and to minimize as much as possible the business disruption caused by the pandemic. Neurosoft followed a strict Business Continuity plan fully aligned with the Government's guidelines and best business practices.

Page 5 of 89